Escatel Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. Data for the most recently completed year appear below.
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Estimates made at the beginning of the year :
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Estimated labor hours
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24,000
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Estimated variable manufacturing overhead
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$6.86 per labor hour
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Estimated total fixed manufacturing overhead
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$394,560
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Actual labor hours for the year
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24,500
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Required:
Compute the company's predetermined overhead rate for the recently completed year.